Making mistakes at the entry-level is a common occurrence.
But a newbie trader should be cautious.
Before getting onto the right track, know the following mistakes in forex.
Forex does not lie entirely on trends; give balanced attention.
You have to find a suitable strategy for you.
Following the crowd always is not good.
Believe your analysis and strategy.
And don’t always make the news your important factor in your plan.
1. Never go without a plan
- Without a plan, you would hit failures sooner or later.
- In general, beginners start to trade without plans.
- Then, your goal is at risk.
- And you would trade with emotions instead of analysis.
- Continuous losses will break your optimism, and you would lose hope.
- So, make a plan and stick to it.
- Moreover, follow your plan with discipline.
2. Avoid doing things excessively
- Don’t do things to lose more than you can bear.
- Beginners believe in all opportunities and go for everything.
- So, they tend to overtrade and use too much leverage.
- But pro traders limit their curiosity and go for the relevant ones.
- And they don’t risk more than 1-2% of their equity in a single trade.
- Don’t go for high stake trades; it would end your trading soon.
3. Manage and reduce your loses
- You have to enter into calculated trades.
- Then only, you can control your losses and win trades.
- The widely used, 1-2% risk ratio works well in saving your capital.
- Don’t place too many trades.
- If you want to bet more, don’t risk more than 6-10% of your equity.
- It saves your huge investment.
- Instead of going for one big risk, diversify your investment.
4. Withdraw your gains and don’t wait for long
- Holding out the trades for too long is not advisable.
- A profitable trade would get reversed and lose value.
- So, you should be quick in deciding about taking the profit.
- Using trail stops would yield good results.
It will be better to practice and visualize the precautionary measures.
Rehearse it before going for actual trades.
Avoid mistakes and stay long in trading.